SEC: Former Ross Employee Key To Insider Trading Scheme

The United States Securities and Exchange Commission has charged Roshanlal Chaganlal, who was a director in the finance department at Ross Stores Inc. Dublin, CA headquarters and three other Northern California residents with insider trading in the retailer’s stock options based on nonpublic information. The charge alleges the trading was based on monthly sales results leaked before the company publicly released them.

The SEC stated that it is alleging that Chaganlal routinely tipped his friend Saleem Khan about Ross sales results. The commission said Khan used the confidential information to illegally trade on more than 40 occasions ahead of the company’s public release of financial results. Besides trading in his own brokerage account, Khan traded in his brother-in-law’s account as well as one belonging to an acquaintance. The commission went on to say Khan also tipped his co-workers Ranjan Mendonsa and Ammar Akbari so they could trade in Ross stock options based on the nonpublic information.  The insider trading generated collective profits of more than $12 million, according to the SEC.

“Khan and Chaganlal took advantage of confidential company data to systematically trade in Ross securities and reap millions of dollars in profits,” Jina Choi, director of the SEC’s San Francisco Regional Office, said in announcing the allegations.  “Even when insider traders try to conceal their profits and kickbacks by using other accounts and intermediaries, we’re committed to piecing together these widespread schemes and catching the perpetrators.”